Casting the Super Committee

I wrote this morning about Snow White, who was friends with seven dwarfs (and figured in the imagination of Alan Turing); perhaps that should have prepared me for what the Joint Select Committee on Deficit Reduction, also known as the “super committee,” looks like so far. This is the group dreamed up in the debt-ceiling deal. There will be twelve members, with three from each party in each house of Congress; nine have been named. Mitch McConnell, for the Senate Republicans, chose Jon Kyl, Rob Portman, and Pat Toomey; John Boehner, for House Republicans, picked Dave Camp, Jeb Hensarling, and Fred Upton; Harry Reid, for Senate Democrats, Max Baucus, John Kerry, and Patty Murray. Nancy Pelosi still has her turn. But, to tally things up so far, we have legislators from, respectively, Arizona, Ohio, and Pennsylvania; Michigan, Texas, and Michigan; Montana, Massachusetts, and Washington. Will Pelosi cut New York, Florida, or California in on this? Also: eight men and one woman.

Murray is co-chairman (along with Hensarling) and her name was the one some Republicans say they want withdrawn, because she is also the chairman of the Democratic Senatorial Campaign Committee, and so would be thinking about raising money and politics. How would that make her different from almost all of her colleagues? It might actually give her some influence in terms of pushing for a consensus.

But those concerns assume that the congressional leaders are selecting an actual deliberative body, rather than casting a piece of political theatre. It’s not at all clear that that’s the case. The super committee has until Thanksgiving to find one and a half trillion dollars to cut from the deficit. If it isn’t completely deadlocked, then that goes to Congress, which might be completely deadlocked and meanwhile is supposed to be keeping itself busy arguing about a balanced budget amendment to the Constitution and with a ritualistic “vote of disapproval” on a second installment in the debt-ceiling increase. And if all that comes crashing down, there will be automatic cuts in domestic and security spending. In other words, there are built-in opportunities at almost every stage for congressional bad behavior.

How will this way of doing business affect the economy? The Dow closed down more than five hundred points today. It’s impossible to tell where the markets will be in November, when the super committee will be super busy. (At least the Mets’ season will be over, cutting down on the number of sad spectacles.) This week, it’s been hard to guess, even by a margin of a hundred points, where the Dow will be from minute to minute. But that much uncertainty can’t be good.*

Any other signs of compromise, or its opposite? Politico points out that “every Republican member of the deficit reduction committee has signed tax activist Grover Norquist’s pledge not to raise taxes.” Was that a condition of selection? Norquist is a bit of a Rumpelstiltskin figure in all this, holding people to destructive promises, but without even spinning any straw into gold.

I told my colleague John Cassidy, who understands these things, that the markets were confusing me. He sent this helpful note:

Up 400 one day and down 500 the next on roughly the same information. The basic point is that volatility is caused by uncertainty. The stock market is basically a discounting machine: it looks at the future and discounts corporate earnings. When the future is especially uncertain, as it is now, then it’s basically impossible to reach a commonly agreed view on what future earnings are going to be. In such a situation, emotion and trend following tend to take over, leading the market to gyrate wildly.

Cassidy also wrote Comment this week, and, in 2005, an illuminating Profile of Norquist.

Amy Davidson Sorkin is a New Yorker staff writer. She is a regular Comment contributor for the magazine and writes a Web column, in which she covers war, sports, and everything in between.